Hero Cycles to get into premium segment; to export to US, UK

NEW DELHI: The world's largest bicycle maker Hero Cycles today said it will foray into the premium segment by launching products in Rs 3,000-Rs 20,000 range by November this year and will set up exclusive outlets for selling them.

The company is setting up a dedicated unit to roll out the premium cycles at Ludhiana. It is also scouting for partners in the US, Germany, Japan and the UK to export the cycles under a contract manufacturing deal.

"Hero Cycles is working on a whole new range of premium brands. These will be targeted to all segments starting from kids. We are looking to introduce a completely new premium brand by November," Hero Cycles Managing Director Pankaj Munjal told PTI.

The company has tied up with a foreign player for the cycles that will be introduced in a price range between Rs 3,000 and Rs 20,000, he said but declined to disclose the identity of the overseas partner.

Munjal said the company is "revamping" its point of sales by setting up dedicated outlets for selling Hero Cycles.

"We will set up exclusive branded Hero Cycles outlets for selling the premium bicycles. These will be through franchisee route and we will open 40 outlets by October in many cities such as Delhi, other NCR locations and Indore," he added.

The company currently sells its products through multi- branded outlets and different Future Group stores.

Munjal said the bicycle maker will at first roll out the premium products from its existing facility in Ludhiana.

"We are setting up the second assembly line within our second facility, which is at present being used for our auto component business. The dedicated second line for producing premium bicycles will be set up for Rs 50 crore and it will be ready by mid-2012," he added.

The facility will have a capacity to produce five lakh units annually. The existing plant rolls out 19,000 units every day.

When asked about exports, Munjal said: "With premium cycles, exports opportunities will also open up for us. We are looking for partners to export our products under a contract manufacturing agreement."

Without giving details, he said the company was exploring the US, Germany, Japan and the UK market for mass exports.

The company at present exports a small quantity to Spain, African region and Poland, he said, adding "We are looking for Rs 150 crore revenue from exports".

Hero Cycles is aiming at pushing up its revenue to over Rs 2,000 crore in 2011-12 from Rs 1,650 crore in last fiscal.